Investing in real estate and becoming a landlord does sound like a great job. You can get a great monthly income without having to work, and it’s less volatile than some investment types. However, there is a lot more to it, so it’s vital you do your research before jumping the gun. In this article, we are going to discuss all the things you need to know about being a landlord. Let’s get started!
It’s Not Always Easy
Most people think that being a landlord is a walk in the park. However, it’s not that simple. There are a lot of legal aspects involved with purchasing a property, and it will take a lot of research before you fully understand everything. From insurance to tax, there are a lot of things to consider, unlike other assets such as gold or bitcoin. So, if you aren’t ready to get down and start learning the legalities behind real estate, this might not be the choice for you.
You’ll Need to Make Trusted Connections
While you can try and do everything on your own as a landlord, it isn’t recommended. Taking on that much responsibility can be difficult, and if you have difficult tenants (see further down the list), you’ll want some support.
By making sure you go through a real estate agency or some other rental system, you can take off some of the load. They’ll be able to complete your inspections for you and refer you to the best people in the business. From home inspectors to professional cleaners, they know it all.
For example, vacation homes in Sedona can get hot with this town being in the middle of Arizona where temperatures can get into the triple digits often. With 300 days of sunny weather a year, there are things you will want to make sure of like air conditioning, your house having plenty of circulation room, and with any remote rental, you will want a vacation rental company that knows the area and customs to optimize your offering.
Before choosing a property you want to know what is happening around the area so you can gauge and predict your rental’s chances and convenience (which means more people will want to rent from you because your needs and theirs are in resonance).
You also don’t want to have to worry about a toilet breaking or other things that require immediate action- this is also the benefit of a management company helping you rent out your vacation home. They take care of a lot of the details so you don’t have to think about it.
There is A Lot of Paperwork
As mentioned above, there are a lot of legal aspects involved with being a landlord, and what that means is, that there is a lot of paperwork. From possible tenant applications to insurance plans, you’ll need to sign a lot of different forms. On top of this, things can always go wrong, especially if there is damage to your property. There are many reasons home insurance claims are denied, so make sure you brush up on your facts before you start renting out your property.
You’ll Need to Regularly Maintain the Property
Becoming a landlord doesn’t mean that you can just walk away and leave everything up to the tenants. It’s up to you to make sure the property is safe and up to standards, both during and after you have tenants. This includes providing security options, fixing any broken appliances, and taking care of any small repairs. If you’re having trouble keeping on top of everything, check out these ways to make your back yard easier to maintain.
Tenants Can Be… Difficult
Aside from the endless paperwork and property maintenance, one of the most challenging parts of being a landlord is the tenants. Put the wrong ones up in your home, and you’ll be dealing with complaints, damage to the house, and possible lawsuits. This is why it’s incredibly beneficial to go through a rental management agency or a real estate agency so that they can be the middleman. On top of this, you might not even be able to find tenants for a while. So, do you have enough funds to prepare yourself for this?
There are Certain Tips that Can Help Maximize your Profit
Just like most investment types, there are some ways to maximize your profit. With real estate, there is a good selection to choose from. Firstly you can decide to renovate your property, so that is worth more rent. Secondly, you can select a home in a desired and popular location, and thirdly you can add in other deals (such as including electricity and water in the overall price).
It’s a Great Long-Term Investment
One of the best advantages of owning a rental property is that it is a long-term investment. It’s something that you can make money off of for a very long time, especially if you have built something brand new. However, with that being said, it’s important to understand that there is little liquidity with this. The process of selling a house is a long one, and you won’t be able to simply walk away with some easy cash.
By reading through the above, you should now have a better understanding of what is involved when becoming a landlord. While it certainly is a great way to make an extra income, it’s not the easiest job in the world and requires a lot of effort and maintenance. What do you think, are you ready to give being a landlord a shot?
